Stem cell biology offers tremendous potential to both study and model disease in vitro as well as in the treatment of disease. Diseases of endodermal organs including type I diabetes and various liver diseases are of great concern. There are currently not sufficient donors for islet cells or livers necessary to treat the number of patients requiring transplants. The use of stem cell populations to generate pancreatic islet cells and liver would offer a potential solution to this problem. Currently, work with human embryonic stem (ES) cells and induced pluripotent stem (iPS) cells offer hope in the treatment of these diseases. Both of these cell types can be expanded in culture and have the potential to differentiate into any cell type in the body. Unfortunately, there are several hurdles that need to be overcome before cell replacement therapy becomes a reality. First, both ES and iPS cells when transplanted directly can form tumors. Therefore, it is of critical importance to transplant pure differentiated cell types. In addition, the generation of mature function cell types from these early stem cell populations has proved difficult. To attempt to address these concerns we propose to generate endodermal progenitor cell (EP) lines. EP cells, like ES and iPS cells, can be expanded in culture but lack tumor forming potential. EP cells can also differentiate into endodermal cell types such as hepatocytes and pancreatic cells. Preliminary data suggests that we have found the culture conditions to generate EP cells from human ES cells. We propose to further characterize EP cells, generate EP cells from multiple human ES and iPS cell lines and to differentiate them into hepatocytes and pancreatic islet cells. These differentiated progeny will be functionally assayed in a variety of in vitro and in vivo systems to determine if both ES cell and iPS cell derived EP cell lines are functionally equivalent. Finally, we propose to investigate the mechanisms that control EP cell generation and maintenance. Preliminary data indicates that Notch signaling may promote EP cell formation. We will expand upon these findings, examining Notch signaling utilizing both genetic systems and small molecules to activate or repress the Notch pathway and assay the effects on EP cell formation and maintenance. In addition, other possible candidates discovered using gene expression microarray analysis will also be assayed by RNAi knockdown in EP cells. Genes found to be required in EP cells will then be studied in the context of Notch signaling to establish a signaling hierarchy for EP cell formation and maintenance. This information may make generating EP cells more efficient and may lead to a better understanding of the mechanisms controlling stem cell populations in general.